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Employee Benefits Still Matter

October 27th, 2010 :: Rieva_L

By Rieva Lesonsky

In today’s challenging economy, you might think that employees would be grateful to have a job—any job. But a new survey from the Financial Services Roundtable and Employee Benefit Research Institute reports that benefits are an important factor in job satisfaction for employees at all salary levels.

Over half (52 percent) of employees value their benefits as a way to “protect their financial well-being”. What benefits are valued most? When asked to rate (on a scale of 1 to 5) different benefits in terms of providing financial protection, 85 percent rated health insurance a 5. Sixty-nine percent also rated retirement plans a 5, but that number increased to 80 percent as workers’ ages and incomes rose.

Interestingly, some other benefits were valued more highly by lower-income employees. While 48 percent rated life insurance a 5, that increased to 67 percent among workers making less than $35,000. Although less than half (39 percent) of workers rated long-term disability a 5; that rose to 52 percent among workers making less than $35,000. And while 35 percent rated short-term disability a 5, the number rose to 45 percent among workers making less than $35,000.

The power of benefits is evident in these results:

  • 36 percent of employees have taken a job because of the benefits and insurance an employer offered;
  • 40 percent have stayed in a job because of the benefits and insurance offered;
  • 10 percent have left a job because of the benefits and insurance their employers offered.

I often hear entrepreneurs say they can’t afford to offer benefits, but the reality is, you can’t afford not to. As a small business, there are many more options for providing benefits for your employees than ever before—whether it’s 401(k) plans (which can now be offered by even the smallest companies) or work-life benefits such as flextime or work at home policies. Benefits don’t have to cost a lot—and as this survey shows, they bring you a lot of loyalty in return.

Image by Flickr user Andrew Magill (Creative Commons)

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View Comments to “Employee Benefits Still Matter”

  1. Quadcoenvironmental says:

    It is my experience that the kind of employees that employers say they are looking for: responsible, dedicated, interested in long term employment and in improving their performance and taking on more responsible are the same people that have personal responsibilities – such as families they care about providing a home and health insurance and good schooling for. I find it curious, after sitting in management meetings listening to bosses and/or company owners railing about the careless, irresponsible screw ups that are occurring, and the exorbitant cost involved, that there was such vehement defensiveness about spending money on benefits to attract the kind of employees that would make them happy. When I tried to point out that the kind of responsible and dedicated employees they were seeking were taking jobs that offered benefits at other firms, I not only got an argument about it, I was personally attacked and accused of having invalid opinions. In my opinion, it is much more rational to spend the money on benefits to attract the best employees, instead of blaming middle managers for the mistakes of the only kind of employees that will take a job despite the lack of benefits. Overseeing employees that don’t give a damn, and that I had no say in hiring, puts an incredible extra burden on middle managers. Many times I had the feeling that I would be better off without the person, as they increased my work load more than if I did their work myself. Managers and owners need to stop thinking about saving expenses to increase monthly profits and consider long term benefits of providing what it takes to attract top notch workers and increasing positive productivity and future growth of profits.

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